A few weeks ago we shared the good news in the U.S. October CPI numbers. Now we see more good news: Both Europe inflation and U.S. PCE numbers came in below expectations.  One caveat is that these additional numbers measure essentially the same moment as the October US CPI. But that said, this is unadulteratedly good news. Here are a few reasons why:

1. For Europe, this was the first time in 17 months that inflation has decelerated.
2. European core inflation was steady at 5%.
3. This helps central banks such as the European Central Bank trust that inflation will start to normalize in 2023 without changing plans to further tighten monetary policy.
4. For the U.S., core PCE inflation was 0.2% in October. That's a rate that's in line with the Fed's annual targets.
5. The PCE showed the biggest jump in real personal spending since January. That means consumers are doing ok financially!
6. This increases the odds of a soft landing, where inflation moderates without a recession. A recession remains likely, but this tilts the odds away a few percentage points.

This remains a "to be closely monitored" space. Inflation and the central bank actions it spurs are our main recession threat right now, so seeing prices stabilize is more than welcome!